An unsecured personal loan is money you borrow without providing any security, that you simply repay over a fixed repayment term.
So, you’ve found yourself in a situation where you need to borrow money but have no idea which loan is right for you. An unsecured personal loan means borrowing money from a bank or another lender and mutually agreeing to make regular and substantial payments until the debt is paid off in full.
Unsecured personal loans are very popular with first-time borrowers. It’s more straight forward than a secured loan because when a loan is ‘unsecured’, it means there is no property or collateral to secure the guarantee of the loan.
This makes it less risky for the borrower. However, this also means the interest rates tend to be higher. Unsecured personal loans are typically available to would-be borrowers who demonstrate a fair credit score.
They can be used to borrow anything from £1,000 to £25,000. Nevertheless, they are deemed to be at their cheapest when borrowing between £7,500 and £15,000
There are a few different types of unsecured personal loans, and it isn’t a cookie cutter style of borrowing. Whether you’re starting a business, consolidating debt into one possibly less expensive loan or purchasing an expensive item, there will be a loan out there which will suit your needs.
Credit card and student loans are the most common reasons for borrowing. However, always take into consideration that loans carry late payment charges if you fall behind on your payments. This could ultimately affect your overall credit score.
If you have a high credit score, you should have no problem getting an unsecured personal loan. If, on the other hand, your credit score isn’t great, don’t worry, it’s not the end of the world, and you shouldn’t let this put you off looking for a loan. There are always different ways to get access to the funds that you need. It could just be a case of paying a higher interest rate or trying to improve your credit score before applying.
The world of loans can sometimes be a complicated one when you aren’t familiar with ‘financial lingo’. However, if you take time to do your research and find which loan is best for your particular need, then it quickly becomes a much less scary prospect. In times of need, unsecured personal loans can be the helping hand you’ve been looking for.
If you are having financial difficulties or need to speak to someone regarding your financial situation before applying for a loan you can get free and confidential advice from The Money Advice Service, National Debtline or debt charity StepChange.
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Representative 97% APR (fixed)
Representative example: Borrow £1000 for 24 months at 24 equal instalments of £77.48. Total amount to repay £1,859.52. Interest £859.52. Annual interest rate 70% (fixed). APR rates range from 45.3% APR. to 1575% Max APR. Your APR rate will be based on your circumstances.
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